PayPal stock price has dived in the last few years, moving from a record high of $308 in July 2021 to a low of $40 this month as the company’s woes continued. Its market capitalization has declined from over $38 billion, resulting in a $268 billion loss. So, will the new CEO reboot the company?
PayPal Stock Has Crashed Amid Major Challenges
The PYPL stock price has been in a strong downward trend over the past few years, as the company has declined from one of the top fintech names to a fallen angel, losing over $268 billion in value.
PayPal’s woes accelerated recently when it published its financial results, which showed that its business had slowed down substantially in the past few years.
Its revenue rose by 4% to $8.7 billion, while its transaction margin dollars (TMS) rose by 3% to $4 billion. Operating income grew to $1.5 billion, while EPS increased by 38%, driven by its robust share repurchase program.
PayPal issued weak forward guidance, expecting that its first-quarter and full-year earnings per share will decline this year. This explains why the company decided to replace Alex Chris with Enrique Lores.
READ MORE: Solana Price Prediction: Giant H&S Pattern Forms as Transactions Surge
Turning around PayPal will take time as the company faces major challenges that may affect its growth. Competition across its branded and unbranded products continues to intensify, with companies such as Google and Apple gaining market share.
The company is also being disrupted by stablecoins, which are enabling companies and customers to move money faster and more cheaply. This explains why other companies such as Block, Fiserv, and Shift4 Payments have declined in the past few months. Jack Dorsey’s Block is even laying off workers to reduce costs.
Therefore, Lores will have difficulty turning around the business due to rising competition in the payments industry.
PYPL Stock Price Prediction: Technical Analysis
The weekly chart shows that the PYPL share price has been in a pronounced downward trend over the past few years. It recently dropped below the key support level at $49.20, its lowest level in October 2023.
The stock has formed a head-and-shoulders pattern, a common bearish pattern. It also moved below all moving averages and the Supertrend indicator.
Also, the Relative Strength Index (RSI) has declined, and the Average Directional Index (ADX) reached 20, its highest level since July last year.
Therefore, the most likely scenario is that the PayPal share price will continue to fall in the near term, potentially to the psychological level of $35. A move above the key resistance level at $49 will invalidate the bearish outlook.
READ MORE: XRP Price on Edge as Ripple Lays Plans for a Higher XRP Burn Rate
